Weekly Game Plan 23.7.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

Market participants try to ignore trade war fears but tweets and/or interviews with US President Trump continue to spook them. Over the weekend in a G20 meeting, Mnuchin proposed that all G7 allies drop trade barriers but French FinMIn Le Maire replied “We refuse to negotiate with a gun to our head".

Themes for the Week:

Trade Wars will remain in focus this week and Trump will meet EC President Juncker on Wednesday in hopes it will be the start of dialogue on various trade issues that will end the tit-for-tat tariff impositions. Market participants are actually expecting more trouble, instead of a resolution. China remains in the spotlight, as a growing number of analysts believe Chinese authorities are allowing the Yuan to weaken as part of its strategy to offset the impact of trade tariffs.
The ECB gathers on Thursday and after the excitement generated at its last meeting, this will also be of great interest to those looking for further guidance. Another question will be about the bond redemptions. So far the ECB seems intent on reinvesting in long-dated bonds, thus keeping the stimulus alive.
Nearly 35% of S&P companies report this week – including tech giants Facebook, Amazon and Alphabet. Despite high expectations coming into the Q2 Earnings season – over 85% of the 15% of S&P companies reporting so far have beaten estimates. However, Q2 results also stream in from big European carmakers Peugeot, Fiat, Daimler and Renault. Earnings growth estimates have all taken a beating on the tariff threats and Trump/Junker meeting will also impact automotive stocks this week.

Data in the week ahead:

The main event for US data in the week ahead will be Q2 Advance US GDP, which is expected to come in at 4.1%.
The main event in Australia in the week ahead is Q2 CPI.

What's on the radar:

It seems that (finally) FX markets are starting to worry about Trump's protectionist agenda. JPY was sold into the end of the week and CHF was also bought. USD showed weakness. These current moves are susceptible to headline risk of course (given summer markets/low participation) but going into the week a short USDJPY/GBPJPY stance looks quite decent alongside USDCAD shorts.  DAX also looks poised for further losses as the automotive industry weighs.

Good Luck!

Weekly Game Plan 16.7.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

There wasn’t any market moving news on the weekend, and with the FIFA World Cup final today (Sunday) there shouldn't be much focus on anything else until the week starts. 

Themes for the Week:

• US/China Trade Wars are always on trader's minds although participants have recently shown some resilience towards trade jitters. This may have to do with Evercore's Ed Hyman and Allianz's Mohamed El-Erian talking down trade war threats and forecasting the US will be better off in the end. The US/China trade war fear will likely recede further into the background unless the coming earnings season shows signs of tension: in the week ahead we get earnings from Bank of America, BlackRock, Netflix, Goldman Sachs, Johnson & Johnson. Morgan Stanley, Alcoa, eBay, IBM and Microsoft. 
• Also, China concerns are on the rise, as many analysts see the rising trade tensions between the US and China coinciding with a slowing Chinese economy. China Q2 GDP will be released on Monday along with monthly Retail Sales, IP and Urban Investment. 
• Fed Chair Powell gives testimony to US Congress in the week ahead after the Fed’s upbeat semi-annual report on Friday.  What will be of interest to the markets will be Powell’s comments on US trade policy and the potential of that policy to cloud the Fed’s upbeat outlook.
• Trump and Putin hold their first summit in Helsinki on Monday. This will be quite a match because both leaders like to play hardball.

Data in the week ahead:

• US retail sales are expected to increase strongly in June.
• China will release Q2 GDP figures.
• In the UK there will be updates on unemployment, earnings and consumer inflation. This will be influential for the BOE's August rate hike probabilities.
• Australia will release the labour force report on Thursday. RBA Minutes are also due.
• NZ Q2 CPI is expected to show the annual rate of inflation has lifted.
• The IMF will publish an update to its World Economic Outlook.
• Canada has Retail Sales & CPI out on Friday.

What's on the Radar:

I remain bullish on the Nasdaq going into earnings season; I remain bearish on commodities (Crude & Copper) which have proven to be most sensitive to the trade war jitters; I remain bearish on NZD vs. Aud & GBP; I'm bullish on GBP vs. Jpy, Nzd.


Good Luck!

Weekly Game Plan 9.7.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

USD closed last week on a weak note after a retreat in wage pressures and a rise in the unemployment rate. This should set the tone for the week ahead, given that there have been no surprizes over the weekend and the Wellington open should be relatively calm.

Themes for the week ahead: 

• Trade Wars will continue, as Trump is threatening to tax Chinese goods worth $500 bln. $34 Bln of tariffs have been in place since Friday morning so China's retaliation (if any) is key.
• Global equity markets continue to feel the tension as the FOMC continues to hike and other central banks (BOE and BOC first and foremost) are following suit. The fear is that CB's are hiking into a recession, as the global recovery and bull market are quite mature. Together with trade war jitters, markets are on edge. There is much talk about the yield curve inversion, but the FOMC has clearly stated that they are not paying attention to that signal as easy policy has changed the dynamics in play. However another ominous sign comes from the value of Mergers and Aquisitions, which has reached record levels in 2018.
• The GBP will be in the spotlight with a busy data calendar but also with participants digesting the outcome of Friday's rebellious Brexit showdown. PM May is being forced to commit to a clean Brexit from both sides of the political spectrum, despite the warnings of mass exodus on behalf of industrial giants if EU trade ties are lost. Tough spot to be in.
• Crude oil might come back on the radar. OPEC has agreed to ease output curbs but prices are receiving fresh impetus from Washington’s new sanctions against Tehran. Those in turn have led Iran’s Revolutionary Guards to threaten a blockade of the Strait of Hormuz, the world’s most important oil artery through which a fifth of the world’s oil consumption passes. Tensions are running high, with the U.S. Navy standing ready to ensure free navigation through the channel. (Reuters)

Data in the week ahead: 

• In the US the June inflation report will be the highlight.
• In China a number of key economic releases will take place. On Tuesday June inflation data is released and on Friday we receive trade data. US-China trade tensions will continue as tariff rises take effect. The real economic impact is expected to be small but there is a risk it could impact business and investor sentiment in a more meaningful way.
• The UK has a busier week with trade, industrial production, construction output and the first monthly estimate of GDP all due.
• Bank of Canada will meet for it’s July rates decision.

What’s on the Radar:

• Lower wages/lower USD have propped up equities: https://www.tradingview.com/chart/NQ1!/fO2Vh2ng-Nasdaq-Biased-Long-after-NFP/
• Copper should remain under pressure if China data disappoints: https://www.tradingview.com/chart/HG1!/q2q3T9Sc-Copper-Negative-Bias-In-Play/
• USDCAD should remain biased short into the BOC meeting: https://www.tradingview.com/chart/USDCAD/V07zd2o8-USDCAD-Biased-Short-into-the-BOC-rates-decision/
• GBPUSD remains another decent bet against USD despite Brexit issues: https://www.tradingview.com/chart/GBPUSD/eZHAiwab-GBPUSD-Poised-for-further-gains/

Good Luck!

Weekly Game Plan 2.7.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

Back on deck after a brief break from the markets. Welcome to H2 2018! This week starts with Canada Day and then we get US Independence Day on Wednesday.

Themes for the week ahead: 

China will remain a big focal point this week. Over the weekend, PMI data disappointed, most likely suffering from tighter credit growth and rising US/China trade tensions. The new export order sub-index fell into contraction territory for the first time since February. If that weren't bad enough,  US trade tariffs on China are set to take effect on July 6 (Fri). CNY fixes will be watched closely as participants feel that the PBOC is allowing the CNY to drop in order to fend off the tariffs. This isn't positive because int'l investors want to see a stable (non-manipulated) currency in order to have confidence in a country as influential as China.

Beyond that, the CSU (Merkel’s coalition partner) still has to  decide whether Friday's EU immigration deal satisfies their concerns about containing the borders. The vote hasn't been issued just yet so participants will likely look for that tomorrow first thing. Expectations are for a positive vote...I'm not so sure. 

Will Saudi Arabia bow to Trump? Just after OPEC decided to increase production by around 1 million bpd, Trump demanded an extra 2 Mln bpd! Obviously the markets will sell Crude if Saudi complies. Keep your eyes on the story and on Trump's tweets.

Data in the week ahead: 

On the data front, the big item is NFP but ahead of that we get Caixin Manufacturing and Services PMI, RBA rates decision and Australian Retail Sales, UK PMIs and CAD Employment.

What's on the Radar:

The moves in the USD on Friday were heavily influenced by technical and month-end factors - so don't give them too much weight. Moreover, NZD is a clear loser after RBNZ's dovish hold; CAD is a clear winner after Crude Oil's ascent. Copper is still weak. Regarding equities, we'll need to wait & see what comes of CSU's vote and tariffs this week.

NZDCAD: https://www.tradingview.com/chart/NZDCAD/CfiW6Rqk-NZDCAD-Bias-Remains-Short/
EURNZD: https://www.tradingview.com/chart/EURNZD/302APxVk-EURNZD-Bias-Up-but-Strong-Resistance-Ahead/
Crude: https://www.tradingview.com/chart/CL1!/FngjjYd5-Crude-Oil-Bias-Remains-Positive/

Copper: https://www.tradingview.com/chart/HG1!/WhFvFeez-Copper-Bias-remains-negative-but-supports-in-focus/